Public debate focuses on television

Date: 22/04/1999

By Peter Chapman

THE European Commission has just completed a major public consultation exercise on future policy to take into account the mysterious new phenomenon of 'convergence'.

But publication of the results of this year-long study, carried out jointly by staff working for Acting Telecoms and Audio-visual Commissioners Martin Bangemann and Marcelino Oreja, went virtually unnoticed.

The timing was, to say the least, unfortunate. Their report was quietly released just a week before Commission President Jacques Santer and his team were forced to resign over the corruption scandal which brought the institution to its knees.

So, after over a year of soul-searching, what did the massive exercise to consult everyone from governments and consumers to the key players in the information technology, media and telecoms industries achieve?

Not a lot, according to sceptics like John Frank, Microsoft's top EU lawyer. "While it is appropriate to think about how it is going to evolve and what are the regulatory implications, it is hard to see what the rush to regulate is. We are only at the beginning," he insists.

The Commission's Green Paper may have offered little more than a sounding board for IT companies anxious to get their views across on the rules and regulations which should govern their forays into the world of the 'new media'.

But the ensuing argument over how the EU's television policy should be adapted in light of the challenges presented by convergence ignited the debate - and produced results. These are expected to be fed into proposals for regulating the television and media sectors which are due to be finalised this autumn.

" I would say 90% of the debate at the Commission's hearing on the convergence paper was taken up by public service broadcasting," said one IT industry participant.

It is not hard to understand why early drafts of the Green Paper from the office of outgoing Telecoms Commissioner Martin Bangemann prompted an outcry from traditional broadcasters.

They felt it talked too much about the nuts and bolts of digital television, as compared with the telecoms and IT sectors, without taking into account its massive cultural impact on the lives of ordinary Europeans.

Bangemann and his officials pointed out that digital TV channels did not need as much space in the airwaves as old fashioned analogue ones. At the same time, they said, satellite, fibre and cable networks with massive capacity would also be able to carry hundreds of broadcasts simultaneously.

Their conclusion was that the television channels of the future should not be so rigidly controlled by member states as in the past. It would be enough to ensure that there was fair access to the technological infrastructure, more or less leaving the market to decide the rest.

A rearguard action by Audio-visual Commissioner Marcelino Oreja toned down the wording of the controversial parts of the draft paper, and a vociferous response from the public television sector tipped the balance.

As a result, the final conclusions in the report on the consultation exercise were inevitably couched in a much more conciliatory tone.

There was broad agreement that the broadcasting industry should continue to be regulated and funded in accordance with specially tailored rules, and that organisations which fulfilled a public service remit should still be allowed to receive state funding as long as this privilege was not abused.

Private channels and publishers also warned that public sector organisations should not be allowed to squeeze rivals out of new services, such as web publishing, by using funds from government coffers to cross-subsidise these activities. The Union's competition rules, they argued, must be rigidly enforced.

The public broadcasters did not, however, win all the concessions they were seeking. One likely casualty of the consultation exercise is the 50% quota which the EU imposes on the screening of foreign-made programmes by European TV channels.

Officials said "there was a pretty general consensus" that this ceiling, which formed part of the EU's 1989 Television Without Frontiers Directive, was not appropriate in the new media market-place and should be abolished after a broader review of the legislation later this year.

The Commission has also promised more debate on the 'interoperability' (compatibility with different broadcasting systems) of the set-top boxes used to access pay-per-view television and video services, although officials have recently veered away from mandating a particular type of technology.

There was general agreement that as long as the special role of the public broadcasters was guaranteed, rules governing the technology which delivers the converged services, including television pictures, should not be sector-specific. Instead, there should be a trend towards 'horizontal regulation'.

Many sectors of the media industry also joined forces to argue that the EU should continue to fund special financial aid schemes and adapt them to the needs of the new high-tech market place.

This included calls for the Union's Media III programme, which is currently being drawn up, to offset the fragmentation of small and regional markets resulting from the increase in new channels fed by cheap US imports.

In addition, many respondents argued that tax incentives and financial guarantees for investment in the production of content should be encouraged.

There was also much debate on the way the telecoms sector should be regulated to ensure that rivals to the former monopoly companies could get access to the broad band networks needed to take advantage of convergence.

Among the key issues which came to light in the consultation exercise were demands for a level playing-field among Internet service providers (ISPs) and for more competition in the 'local loop' to ensure that customers could access the new services in their living rooms and offices.

Many argued that the former monopolies should be forced to offer rivals the opportunity to rent their local lines linked directly to customers' homes, insisting that this would boost competition in this vital sector. However, others, including some of the former monopoly operators, claimed this would discourage investment in these and alternative networks.

In reality, the ongoing broader review of how well last year's phone market liberalisation package is working was always likely to provide greater insight into the likely shape of future EU policy in the telecoms sector than the convergence consultation exercise.

It is as part of this process, for example, that there will be an in-depth examination of how quickly the slate of 'open network provision' regulations which guarantee fair access to former monopolies' networks should be phased out, and the EU's general competition rules applied instead. A detailed follow-up to this study is expected to be released in the autumn.

While some lament the way the television sector dominated the public consultation exercise on convergence, others claim it was vital to clear the air on this issue.

As one Commission telecoms competition expert put it: "There are other types of convergence; mobile telecoms and fixed, for example. These types of convergence are just as important, but socially less sensitive. To get results you needed to get some agreement on the future of TV."

The weakened state of the Commission means it is unlikely to disrupt the consensus which has emerged between interested parties in some areas as a result of the consultation exercise. This means that the process has provided some real clues to the institution's likely approach towards the issue in future.

Article forms part of a survey 'Converging technologies', p13-20.